Equity types

Hi all - a bit of insight please…

I’d like to know the difference between ENEL.MI
(Milan exch. listing)
And
ENLAY

These are for the same company (Italian utility). The second is ‘over the counter’.
(I am not familiar with these OTC listings).

What is the difference between the two?

I think one is in euro and the other in dollars.

is the risk the same other than FX?

Is there any impact from investing in one vs the other via an ira?

thank you!

 

If it's a US based brokerage your only option will be ENLAY. There's not many US based brokerages that allow you to trade on foreign markets.

OTC stocks are stocks that don't meet the listing requirements for the major US exchanges. Most brokerages charge a fee to buy and sell OTC. I use E-Trade and trade a lot. My fee is $2.95 a transaction. For people not considered active traders that fee is $6.95 a transaction.

Any stock trade has inherent risk. Why this particular stock? If your research leads you to believe it will make big gains, go for it. It's only money.

 

Depending on the brokerage you should be able to buy the foreign shares. I use Fidelity and buy German Japanese Italian or whatever shares in the currency of that market.

There are reasons to do this vs. owning the USA representation. Typically OTC as you note. The best reason for buying local stock market is volume. Some of the versions are very low volume with wide bid ask and hard to dump.

Most brokerages ask how you want your currency and what you want for currency when you settle.

Sometimes I even get dividends in yen or euro.

A lot of this depends on how many shares/$

Lastly are taxes. You will be taxed extremely heavily so moderate your enthusiasm by at least 25%

 

I almost forgot. I own ENLAY. Volume on that version is not super low. Sometimes it is just easier.

Also many foreign stocks have annual or bi-annual or irregular dividends. Not quarterly or monthly.

 

No shit? I just looked that up and I guess Fidelity is the exception to the rule. You cannot buy foreign stocks in a Fidelity IRA though. Only regular brokerage accounts. Next time E-Tarde pisses me off you just gave me some good ammo. Thanks.

 

So if I have Fidelity and can do both should I have a preference for the OTC or the actual equity in Milan?

I am looking at this as a dividend play for my parents so income tax on the dividend should be good in their case.

thank you for all the comments so far I just got back to the US and need to understand all these intricacies…

 

I would stay with the OTC version in this case unless mega shares. The currency part tends not to favor small lots. Not worth the hassle.

I am by no means commenting on the appropriateness of ENLAY in this situation.